Businesses of all types and sizes throughout the United States, Mexico and beyond bring their disputes to Gardere's litigation team and receive practical, responsive, boutique-style attention in return. Our clients have access to the firepower and value of a well-known and highly-regarded Firm's capabilities and interdisciplinary strengths.

Gardere has a national and international energy practice formed around our Energy Industry Team, which is a multidisciplinary group of approximately 80 attorneys with diverse backgrounds, experience and skills specific to the energy industry. Our team includes attorneys who have served as in-house counsel for major energy companies, providing a depth of insight into our clients' needs, issues and concerns. We understand and regularly practice in virtually every sector of the energy, and we represent a wide variety of industry participants from multinational corporations to individuals.

From our offices in the United States and Mexico, our International Practice helps clients operate in today’s global economy. We have more than 30 professionals operating as a boutique within an Am Law 200 law firm and are able to provide focused service with the resources of a large firm. We understand that clients who are engaged in the global marketplace need lawyers who can operate seamlessly across multiple jurisdictions. Our international experts are multi-lingual, are culturally fluent and intimately familiar with various legal systems across the world, especially those in Latin America. Whether you need help with commercial transactions, regulatory matters, customs and import regulations, immigration matters, M&A and joint ventures, international disputes, or international tax planning, Gardere’s international team is here to assist you.

We represent domestic and foreign private funds in all aspects of fund formation, fund operations, platform and add-on acquisitions, and portfolio company operations. Our team has a reputation for being the go-to-lawyers for private equity funds, hedge funds, venture capital funds and family offices. We are known for our vast deal experience, the efficient way we staff and manage our work, and the way we maintain our relationships. We get deals done with sophisticated, strategic, and practical advice tailored to the needs of our clients.

Blogs

GLOBAL BUSINESSES, GLOBAL PROBLEMS – DISCLOSING CATASTROPHIC EVENTS

05.04.11

The impact of the March 2011 earthquake and resulting tsunami in Japan and the region has caused many U.S. issuers to scramble, for example, to replace their manufacturing and supply capacities and otherwise respond to the crisis. Retail companies especially have suffered, as Japanese consumers struggle to repair their shattered homes and care for loved ones rather than buying the latest products or technology on the market.

Back in the United States, executives and their consultants have responded by analyzing current and potential business disruptions, leaving company counsel to help determine what disclosure obligations, if any, the issuer may have with the SEC.

As issuers continue to respond to the crisis in Japan and the region, and other catastrophic events, such as the recent tornados in the southern United States, the following may help navigate applicable U.S. securities laws:

Risk Factors – Risk factors generally describe the most significant factors that may affect the issuer’s business or future performance. The SEC requires disclosure of risk factors in companies’ Annual Reports on Form 10-K, and any material changes to those factors must be disclosed in subsequent reports, such as Quarterly Reports on Form 10-Q. When catastrophic events occur, companies should review their risk factors and consider what, if any, changes are appropriate. It may be worthwhile to review the filings of other companies in similar industries to gauge how others have responded and disclosed these events.

Current Reports on Form 8-K – A catastrophic event generally will not result in a Form 8-K disclosure obligation. Depending on the potential impact of the catastrophic event, however, issuers should consider permissive disclosure—either directly on Form 8-K or by press release that is then filed as a Form 8-K exhibit. In addition, as the implications of these events evolve, and companies are forced to engage new suppliers, manufactures, sourcers and other market participants, or modify arrangements with these participants, corresponding disclosure may be required on Form 8-K.

Financial Statements – Some of the large auditing firms have issued reports on how the Japan crisis and resulting disruptions may affect a company’s financial reports. In Deloitte’s recent report (PDF), for example, it urged companies to address issues ranging from accounting for impairments to assets to adjusting the income statement presentation of any losses from the disaster.

MD&A – In addition to accounting for catastrophic events in the financial statements and notes, issuers should pay particular attention to the Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) portion of their Annual and Quarterly Reports on Form 10-K and 10-Q. Management should discuss and analyze the impact of any catastrophic events on any trends, demands and commitments, including any emerging uncertainties.

Regulation FD – As they respond to catastrophic events, issuers should beware of making any inadvertent disclosures of non-public information. Under Regulation FD, when an issuer discloses material nonpublic information to certain persons, the issuer must disclose that information publicly to provide full and fair disclosure to all market participants.

Antifraud Liability – Issuers should ensure that they do not make any material misstatements or omissions in discussing the impact of any catastrophic events in periodic reports or press releases, on their website or in any oral communications, such as earnings calls. Liability under Section 10(b) of the Exchange Act and corresponding Rule 10b-5 can be civil or criminal, and generally turns on the materiality of any misstatement or omission. Any concerns over materiality should be discussed with counsel in detail.

Stock Exchange Requirements – Issuers analyzing disclosure obligations upon a catastrophic event should take into account any stock exchange requirements. For example, Nasdaq Marketplace Rule 5250(b)(1) requires that issuers notify Nasdaq at least ten minutes before releasing certain material information to the public during business hours. In the unusual event that an issuer is permitted to maintain confidentiality of a material event, such as the case where immediate public disclosure would prejudice the issuer’s ability to pursue its legitimate objectives, Nasdaq-listed issuers still must disclose the information to Nasdaq upon request.

SEC Reporting Relief – The SEC has authority under Section 36 of the Securities Exchange Act of 1934, as amended, to provide exemptions from periodic reporting and other relief. In 2005, for example, the SEC used this authority (PDF) to provide relief to issuers in the aftermath of Hurricane Katrina. While the SEC has not afforded issuers similar relief with respect to the Japan crisis, it may do so upon any future catastrophic events.

OUR TAKE: Catastrophic events not only affect a company’s bottom line, but also may raise SEC and stock exchange disclosure obligations and other issues. After getting a handle on the business effects of any catastrophic event, issuers should be considering, among other things, the issues raised above and consulting with counsel and outside auditors to ensure complete information, and avoid misleading information, in the market.

The publications contained in this site do not constitute legal advice. Legal advice can only be given with knowledge of the client's specific facts. By putting these publications on our website we do not intend to create a lawyer-client relationship with the user. Materials may not reflect the most current legal developments, verdicts or settlements. This information should in no way be taken as an indication of future results.

Newsroom

All rights reserved. Attorney advertising. Unless otherwise specified, Gardere attorneys are not certified by the Texas Board of Legal Specialization.

Search Tips:

You may use the wildcard symbol (*) as a root expander. A search for "anti*" will find not only "anti", but also "anti-trust", "antique", etc.

Entering two terms together in a search field will behave as though an "OR" is being used. For example, entering "Antique Motorcars" as a Client Name search will find results with either word in the Client Name.

Operators

AND and OR may be used in a search. Note: they must be capitalized, e.g., "Project AND Finance."

The + and - sign operators may be used. The + sign indicates that the term immediately following is required, while the - sign indicates to omit results that contain that term. E.g., "+real -estate" says results must have "real" but not "estate".